Pay-per-click advertising is a marketing system on the Web, most often found on search engines, in which an advertiser pays when a user clicks on his advertisement. The user is then sent directly to that advertiser’s site.The results of a search are based on how much the advertiser bid for placement. The advertiser bidding the most appears first in the results list; the second highest appears second, and so on. After all paid advertisers are displayed, remaining free results follow. The pay-per-click search engine charges the advertiser’s account for the bid amount.

Here are five tips to reaping rewards using PPC advertising:

  1. Do the math. To truly get your money’s worth when you buy PPC ads on the Web, it’s not really about the size of your company, rather it’s about the margins on the products you’re selling – and whether the sales PPC brings justify its costs. For example, assume you’re selling or reselling HVAC systems each worth $100,000. If it’s costing your company $1 per click and you run an ad that brings 100 people to your site and leads to 10 sales, the cost was only $100 and the sales could each be worth $10,000. That’s well worth the trouble. For a small item with a margin of $25, the same model might not make financial sense.
  2. Experiment for profit. Anicon typically recommends that its customers “throw the tap wide open,” spending as much as they can for a fixed period at the outset to see what happens. It’s not a good idea to go cheap out of the starting gate, as opportunities could be missed, McDerment says. Overspend for a fixed period of time, then you can always scale back and spend accurately long-term. “If you set your limits correctly you’re not going to get yourself into too much trouble,” he says.
  3. Choose your helper. There are many consultants that help plan PPC ad campaigns. Companies such as Anicon will charge to set up your campaigns, write them, establish metrics, set up tracking tools and help with further analysis. You will pay Google (or whoever you’re using) for ad words and Anicon will report on how well your campaign is working, helping you make sense of the data. Besides driving traffic to a company’s site, PPC campaigns are also an excellent primary research tool for small businesses, says McDerment, since “the way people find you and search for you is never quite what you think it will be, and the things that convert people are never what you’d expect.”
  4. Are things alright at home? This primary research can be quickly applied to improve your actual Web site. Take what PPC has taught you about your customers’ use it to your advantage on your home page. Many large companies use ad words to see if there is a market for a product that has yet to be released. McDerment says there is a huge — and instant — market online, but you must build content on your Web site that is persuasive. “It’s not good enough just to get them to your site. The site then has to be an effective tool at converting people and getting them to buy.”
  5. Be specific. You want to be precise when it comes to the ad words you bid on, as well as the short ad copy that comes up when someone clicks on your bid term. If you match too broadly – so if you run a campaign for “shoes’ when you’re trying to sell leather, high heel shoes – your results will be worth a lot less. Buy “leather high heel shoes,” a very descriptive keyword phrase, and then write an ad that’s going to convert people to click it. McDerment says it’s a good idea for those doing the search of a term to see the same term, worded the same way, in the actual ad. “Writing bad or vague ad copy is probably the first mistake people make,” McDerment says.

Mike McDerment is president of Anicon Inc., of Toronto, which helps small and medium-sized businesses enhance their on online presence with database software solutions.

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